But now there's a new problem: Xiaomi, a rising Chinese tech juggernaut, is attempting to throw a spanner in the works with a phone launch of its own.

The five-year-old, $45 billion startup has been a persistent thorn in Samsung's side. Right now, the South Korean electronic company's smartphone division is under pressure, as it faces unprecedented competition from both the high and the low end.

At the high end, there is Apple, which saw record sales and profits after it launched the larger-screened iPhone 6. Meanwhile, at the low-end, there is an array of Asian smartphone startups offering devices for far cheaper than Samsung can offer. Huawei, one such company, is now the third-largest smartphone manufacturer in the world, according to data from Strategy Analytics.

The Chinese company has announced the launch of its Redmi Note 2, which will go on sale on August 16. Like Samsung's Galaxy Note, it is a phablet device with a large screen — 5.5 inches as compared to 5.7 inches on the Galaxy Note 4. Unlike, the Galaxy Note, however, the Redmi Note will be affordable on a budget. It starts at RMB 799 (£79.91), or RMB 999 (£99.91) for a more expensive Redmi Note 2 Prime.

Right now, Xiaomi devices aren't available in Western markets like the US and the EU, and the company says it doesn't plan to expand into them for a few years. But Samsung's sales have cratered in markets where it and other low-cost manufacturers are active: In China, Samsung saw its sales collapse by 50% in a year between Q1 of 2014 and Q1 of 2015, according to IDC. In the same timeframe, Xiaomi grew 42.3% in the country, while Huawei jumped up by 39.7%.

Xiaomi has also announced a new version of its Android operating system, MIUI 7, as well as a new router.